Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At
During 2016 and 2017, Faulkner Manufacturing used the sum-of-the-years'-digits (SYD) method of depreciation for its depreciable assets, for both financial reporting and tax purposes. At the beginning of 2018, Faulkner decided to change to the straight-line method for both financial reporting and tax purposes. A tax rate of 40% is in effect for all years For an asset that cost $28,100 with an estimated residual value of $1,100 and an estimated useful life of 10 years, the depreciation under different methods is as follows: Year Straight Line 2016 2017 Difference $2,209 1.718 3,927 SYD $2,700 2,700 5,400 $4,909 4,418 $9,327 Required 1. Prepare the journal entry that Faulkner will record in 2018 related to the change 2. Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2018. Prepare the journal entry that Faulkner will record in 2018 related to the change Complete this question by entering your answers in the tabs below. Required 1Required 2 Prepare the journal entry that Faulkner will record in 2018 related to the change. (If no entry is required for a transaction/event, select No journal entry required" in the first account field. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet Record the 2018 depreciation adjusting entry. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Required 1 Required 2 Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2018. Prepare the journal entry that Faulkner will record in 2018 related to the change. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar.) View transaction list Journal entry worksheet Record the 2018 depreciation adjusting entry. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started